Second-time buyers being clobbered worse than FTBs

Friday 3rd February 2012

Many home owners who want to trade up the housing ladder are being hit harder than first-time buyers, the Council of Mortgage Lenders has said.

It says that lenders typically want deposits higher than those demanded of first-time buyers when measured against income.

The CML says: “Although movers appear to be less susceptible [than first-time buyers] to more restrictive lending conditions, in some cases the reverse is true.”
 
In addition, many would-be home movers have less equity in their properties than a few years ago, and because they usually want to buy a more expensive property for their next home, they are clobbered by higher levels of Stamp Duty than first-time buyers.

As a result, most households will have less equity than just a few years ago, and the CML says “a significant proportion of recent house buyers” would be unable to finance a move up to a more expensive home today unless they also had substantial savings to top up their deposits.

The CML says that while the average of first-time buyers has remained unchanged at 29 years (it says this figure is often mis-reported), the average age of home movers has been edging up from 37 in 2005 to 40 by 2010.

This morning, the Halifax reported that house prices ticked up 0.6% in January, to stand at £160,907.